Qu News - Issue #1
Market Update: Recently the property market, much like the broader economy, has been hit by a mix of COVID-19 restrictions and job losses Australia-wide. Naturally, multiple sectors are displaying declines when observed wholly. It is with relief, however, that the isolated nature of recent downturns pertaining to real estate presents a more positive narrative for our clients. While attention is currently being given to a broad spectrum of “weak rental market conditions”, through careful strategy, our rentals have remained strong in light of recent events.
During COVID throughout Brisbane, certain areas have borne the brunt of price reductions including Brisbane’s CBD, St Lucia, Toowong and Kelvin Grove to name a few. This is no surprise given these suburbs are highly dependent on international working and student visa holders and the decimated international student education industry. Furthermore, demand has weakened for furnished properties typically catering to internationals. Our recommendation to let apartments “vacant” has been welcomed and is indicative of our ability to adapt to the current climate’s conditions. With plenty of tenants shopping around for “a great deal” due to the global situation, we have established that not all properties have required a price cut to secure a lease.
As always in real estate, “staying strong and believing in” the product and adapting our strategies to suit the current market has proved beneficial and we commend our team and our property owners for maintaining composure during this time.
The process undertaken in order to remain stable during the turbulence of COVID has been mutually beneficial for investors and tenants alike. In addition, vacancy periods remain (on average) consistent with pre-COVID turnaround times with the majority of our rentals experiencing 1 to 3-week vacancies. According to realestate.com.au current rent data, we are achieving 6.9% higher rental prices for 1 bedroom apartments for example and 11.8% higher rental prices for 2 bedroom apartments than local competitors.
We thank our valued clients for trusting us through this unique and trying time. We certainly know how hard it has been, but the results are clear!
Evolution: The Virtual Inspection is far from new technology; however, it has quickly become the “norm” in recent months due to safe COVID measures. Until recently, Australian banks would only accept physical on-site inspections but the necessity for property valuations, as an essential part of the economic turnover has taken precedence over previous protocol. These recent changes made by the Australian Property Institute are a turning point for lending in Australia and have influenced the implementation of Virtual Inspections.
These changes in turn allowed alternative inspection methods that would protect the health and safety of owners, tenants and valuers. Sales, rental and routine inspection method changes shortly followed suit.
Since the Brisbane market began experiencing the effects of COVID-19 in March 2020, my team conducted 336 rental inspections by way of both virtual and physical rental inspections. As a result, we have successfully leased 73 properties in this period.
Insurance: Australia’s leading landlord insurance specialist, Terri Scheer, has re-opened their doors to new policies after a temporary cease on new cover!! The Landlord Preferred Policy provides cover for loss of rent, damage caused by tenants and legal liability subject to the terms and limits in the policy, even during COVID. But that’s the catch! “subject to the terms and limits in the policy''. This includes the correct management of arrears control in line with legislative changes, identifying genuine COVID affected tenancies and the accurate execution of variation agreements which are required to be both in line with legislation and support the specific clients’ policy or lack thereof. For example: if your tenant defaults on a negotiated rental amount, the gap between the original rent and the re-negotiated amount won’t be covered under your policy. It is important that the terms are specifically outlined.
This is one of the many challenges landlords are facing whilst negotiating the complexities of property and COVID-19. If you would like us to arrange a new policy for you, please let us know! We look forward to continuing to sustain you and your property pursuits through 2020, whiles we remain confident and committed to results.